SHRI KHANDESHWAR SAHAKARI PATSANSTHA LTD,MUMBAI vs. INCOME TAX OFFICER - 27(3)(1), MUMBAI, NAVI MUMBAI

4. Your appellant craves leave to alter, modify, amend or delete any of the above grounds of appeal, or to add one or more new ground(s), as may be necessary.”

2. Briefly stated facts of the case are that the assessee society did not file its return of income for the year under consideration. The Income-tax Department on the basis of the information gathered during the phase of the online verification under(“Operation Clean Money) found that assessee had deposited cash of Rs. 13,96,500/- in its bank account during the demonetization period (09.11.2016 to 30.12.2016) in old currency notes (Rs. 500/- and 1,000/-) notes but had not filed return of income and therefore notice u/s 142(1) of the Act, 1961 (in short „the Act‟) was issued to the assessee on 08.03.2018 calling for filing a true and correct return of income for assessment year under consideration but no compliance was made on the part of the assessee and therefore assessment was completed said u/s 144 of the act on 07.10.2019 assessing the total income at Rs. 1,24,71,597/-. The assessee filed the appeal before the Ld. CIT(A) but no compliance was made on the part of the assessee of the various notice issued by Ld. CIT(A). The Ld. CIT(A) further observed that the assessee was required to file appeal within 30 days of passing of the assessment order but the assessee had filed the appeal on 30.01.2020 i.e. delay of 85 days. Before the Ld. CIT(A) it was submitted that office bearer of the society were illiterate and the turnover of the society was also meager i.e. Rs. 5,002/- only and there was no professional for handling the taxation work. In support of contention an affidavit was filed and it was further submitted that delay was not intentional and hardship would be caused due to such heavy demand. The Ld. CIT(A) however noted that assessee was credit co-operative society engaged in providing credit to members. The Ld. CIT(A) observed that the assessee should have been more vigilant in complying the limitation in filing the appeal and the illiteracy of the office bearer of the society did not impede in filing of the appeal after due date, surely it could not have impeded filing of the appeal within the due date. The Ld. CIT(A) following the various decision of the Hon‟ble Court‟s referred in the impugned order held that there was no sufficient cause for filing the appeal with the delay of 85 days. Accordingly, he dismissed the appeal in-limine. Aggrieved the assessee is in appeal before us by filing grounds as reproduced as above.

3. We have heard rival submission of the parties and perused the relevant material on record. The impugned order passed by the Ld. CIT(A) reveals that the appeal filed by the assessee was dismissed in limine on the ground of delay of 85 days in filing, without adjudicating upon the merits of the matter. The relevant finding recorded by the Ld. CIT(A) is extracted below for ready reference: “5.5 In the present case, on facts, as already noted above, it has been seen that the appellant committed an inordinate delay in filing of appeal of 85 days. The delay shows negligence and lack of due diligence as the appellant has not provided any grounds which would have shown sufficient cause for delay, and thus, sufficient cause is clearly not established in this case. The appellant has, as already seen, been non-compliant in the assessment proceedings. Such non- compliance in assessment proceedings shows negligence and lack of good faith. Further, without prejudice, even 'sufficient cause' could not have saved the case of the appellant owing to inordinate delay, negligence and lack of due diligence, as per the judgment of the Hon'ble Supreme Court in the PATHAPATI SUBBA REDDY (DIED) (supra) case. Hon'ble Supreme Court, as already seen, has pointed out:  An appeal which is preferred after the statute of Limitation is liable to be dismissed.  The use of the word 'shall' connotes that the dismissal is mandatory subject to the exceptions.  Section 3 of the Limitation Act is peremptory and casts an obligation upon the court to dismiss an appeal which is presented beyond limitation. This is the general law of limitation.  Section 5 of the Limitation Act empowers the courts to admit an appeal even if it is preferred after the prescribed period provided the proposed appellant gives 'sufficient cause' for not preferring the appeal within the period prescribed.  Power to condone the delay is discretionary in nature and may not be exercised even if sufficient cause is shown, based upon host of other factors such as negligence, failure to exercise due diligence etc.  Merely because some persons obtained relief in similar matter, it does not mean that others are also entitled to the same benefit if the court is not satisfied with the cause shown for the delay in filing the appeal;  Merits of the case are not required to be considered in condoning the delay. 5.6 On the basis of the above, it is held that the delay in filing appeal cannot be condoned in the case of the appellant.”

3.2 The period prescribed for filing an appeal before the Ld. CIT(A) is 30 days under Section 249(2) of the Act. However, sub-section (3) thereof vests a discretionary power in the appellate authority to condone delay, if sufficient cause is demonstrated. For evaluating sufficient cause for condonation of delay, For evaluating sufficiency of cause for condonation of delay, the Hon‟ble Supreme Court in the case of Collector of Land Acquisition v. Katiji AIR (1987) 167 ITR 471 (SC) has laid down following six principles:

(i) Ordinarily, a litigant does not stand to benefit by lodging an appeal late. (ii) Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. (iii) "Every day's delay must be explained" does not mean that a pedantic approach should be taken. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational common-sense pragmatic manner. (iv) When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. (v) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (vi) It must be grasped that judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so."

3.3 The Co-ordinate Bench of the Tribunal in the case of Bajaj Hindustan Ltd. v. JCIT (2005) 92 ITD 11 has condoned the delay for one of the reason that Revenue had not filed any counter affidavit opposing the application for condonation of the delay. The Hon‟ble Supreme Court in the case of Sandhya Rani Sarkar v. Sudha Rani Debi AIR 1978 SC 537 held that non-filing of affidavit in opposition to an application for condonation of the delay may be sufficient cause for condonation of the delay. The Coordinate bench of Tribunal in the case of Bajaj Hindustan Ltd. (supra), accordingly, condoned the more than 180 days. The Hon‟ble Madras High Court in the case of Sreenivas Charitable Trust v Dy. CIT [2006] 154 Taxman 377/280 ITR 357 held that in order to advance substantial justice which is of prime importance, the expression "sufficient cause" should receive a liberal interpretation. The Hon‟ble Supreme Court in the case of OP Kathpaliya v. Lakhmir Singh AIR 1984 SC 1744 has held that refusal to condone the delay results in grave miscarriage of justice, thus it would be a ground to condoning the delay. The Hon‟ble Supreme court in the case of Ornate Traders (P.) Ltd. v. ITO (2008) 312 ITR 193 (Bombay) held that expression 'sufficient cause' will always have relevancy to reasonableness and actions, which can be condoned by Court and it should fall within realm of normal human conduct or normal conduct of a litigant. In the case of Concord of India Insurance Co. Ltd. v. Smt. Nirmala Devi (1979) 118 ITR 507 (SC) Hon‟ble Supreme Court held that what is to be looked into is whether there is any taint of mala fide or element of recklessness or ruse and if neither is present, legal advice honestly sought and actually given, must be treated as sufficient cause for condoning the delay. The Hon‟ble Supreme Court in the case of Ram Nath Sao v. Gobardhan Sao, AIR 2002 SC 1201 held that by taking a pedantic or hyper-technical view, the explanation furnished by the assessee for condonation of delay should not be rejected particularly where assessee had arguable points of law on merits and refusal for condonation of delay will cause erroneous loss and irreparable injury to the aggrieved party by terminating lis at the inception. 3.4 The object of prescribing the time period for filing of the appeal is to expedite the proceedings before the concerned authorities and advance cause of the substantial justice 3.5 In the present case, the explanation of the assessee, does not appear to be tainted with mala fides or indifference. The omission appears to be bona fide rather than deliberate default. 3.6 In view of ratio of the decisions referred above and uncontroverted affidavit filed by the assessee, we feel it appropriate to condone the delay in filing the appeal before the ld. First Appellate Authority.

on merits are not adjudicated upon at this stage. Accordingly same are dismissed as infructuous.

6. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on 30/06/2025.